REG - Burford Capital Ltd - Annual results for year ended December 31, 2023
14/03/2024 11:00
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RNS Number : 8740G Burford Capital Limited 14 March 2024
March 14, 2024
Burford Capital Reports Record 2023 Results
Burford Capital Limited ("Burford"), the leading global finance and asset
management firm focused on law, today announces its fourth quarter and full
year 2023 results.
In addition, Burford has made available an accompanying fourth quarter and
full year 2023 results presentation, a shareholder letter and capital
provision-direct and capital provision-indirect asset data tables on its
website at http://investors.burfordcapital.com
(http://investors.burfordcapital.com) .
Christopher Bogart, Chief Executive Officer of Burford Capital, commented:
"Burford had an extraordinary year. Our earnings per share rose 19x to $2.74,
driven by a tripling of consolidated total revenues to $1.1 billion in 2023
due to significant growth in capital provision income, with and without our
YPF-related assets. We achieved a Burford-only net income margin of 63%. With
the courts fully back in business, we had an active year and we anticipate
further substantial levels of activity in 2024 and 2025. Increased portfolio
velocity was reflected in record core legal finance realizations, cash
receipts and realized gains, as well as sizeable unrealized gains arising from
the portfolio moving forward. Our ROTE soared to 32% in 2023 from 2% in 2022,
and we increased tangible book value by 34% to $9.85."
Consolidated financial results (unaudited)
Summary statements of operations
Years ended Three months ended
December 31, December 31,
Consolidated (US GAAP) 2023 2022 % change 2023 2022 % change
($ in thousands, except per share data)
Capital provision income 1,341,923 319,108 321% 325,810 165,942 96%
Asset management income 7,642 9,116 -16% 1,875 2,025 -7%
Total revenues 1,086,902 319,227 240% 292,573 161,336 81%
Operating expenses 271,236 124,272 118% 120,237 42,126 185%
Net income/(loss) attributable to Burford Capital Limited shareholders 610,522 30,506 1,901% 100,095 81,914 22%
Per diluted ordinary share 2.74 0.14 1,857% 0.45 0.37 22%
Summary statements of financial position
Consolidated (US GAAP) December 31, 2023 December 31, 2022 % change
($ in thousands, except per share data)
Capital provision assets 5,045,388 3,735,556 35%
Total Burford Capital Limited equity 2,290,858 1,742,584 31%
Book value per ordinary share 10.46 7.97 31%
Non-controlling interests 916,922 644,486 42%
Total shareholders' equity 3,207,780 2,387,070 34%
Total liabilities and shareholders' equity 5,837,394 4,288,359 36%
In this announcement, references to "FY23"and "FY22" are to Burford's
financial results for the years ended December 31, 2023 and 2022,
respectively. All figures in this announcement are presented on a preliminary
and unaudited consolidated basis in accordance with the generally accepted
accounting principles in the United States ("US GAAP"), unless otherwise
stated. Definitions, reconciliations and information additional to those set
forth in this announcement are available on Burford's website at
http://investors.burfordcapital.com (http://investors.burfordcapital.com) .
Burford-only operational and financial review (non-GAAP)
Selected metrics(1)
Years ended December 31, Three months ended December 31,
Burford-only (non-GAAP) 2023 2022 % change 2023 2022 % change
($ in thousands)
Realized gains 186,443 133,357 40% 62,904 70,487 -11%
Realizations 496,216 350,209 42% 222,115 157,729 41%
Cash receipts(2) 489,209 327,986 49% 109,477 98,514 11%
Deployments 382,195 457,106 -16% 77,763 181,687 -57%
New commitments 691,086 726,273 -5% 242,404 325,705 -26%
(1) Represents Burford-only capital provision-direct, unless noted otherwise.
(2) Represents Burford-only proceeds from capital provision-direct, capital
provision-indirect and asset management and other services.
( )
Group-wide (non-GAAP) December 31, 2023 December 31, 2022 % change
($ in thousands)
Total portfolio 7,170,308 6,146,871 17%
§ Realized gains in FY23 up 40% to $186 million from the prior year (FY22: $133
million), with no contribution from the YPF-related assets
§ Realizations in FY23 up 42% to $496 million (FY22: $350 million)
o Continued strength in realizations in FY23 reflects increased portfolio
velocity, as the case backlog in the courts continues to clear
§ Cash receipts in FY23 up 49% to $489 million (FY22: $328 million)
o Cash receipts in FY23 meaningfully exceeded total operating expenses and
finance costs
§ Deployments in FY23 down 16% to $382 million (FY22: $457 million)
o Current vintage year Burford-only capital provision-direct deployments were
~40% of 2023 total compared to ~60% in 2022 - this is simply a business mix
variation as 2022 had more monetizations and the rapid settlement of a large
2023 matter, producing 37% IRR, meant there was a $100 million of available
commitment not deployed
§ New commitments in FY23 up 4% to $1.2 billion on a group-wide basis (FY22:
$1.2 billion)
o However, capital provision-direct new commitments on Burford-only basis
down 5% to $691 million as BOF-C took a larger share of new commitments (FY22:
$726 million)
§ Group-wide total portfolio increased 17% to $7.2 billion at December 31, 2023
(December 31, 2022: $6.1 billion), due to significant fair value gains and
growth in deployments and undrawn commitments
Selected financial metrics
Years ended Three months ended
December 31, December 31,
Burford-only (non-GAAP) 2023 2022 % change 2023 2022 % change
($ in thousands, except per share data)
Total revenues 976,542 250,605 290% 250,615 143,173 75%
Operating expenses 268,538 122,696 119% 118,161 41,751 183%
Operating income/(loss) 708,004 127,909 454% 132,454 101,422 31%
Net income/(loss) 610,522 30,506 1901% 100,095 81,914 22%
Burford-only (non-GAAP) December 31, 2023 December 31, 2022 $ change % change
($ in thousands, except per share data)
Tangible book value attributable to Burford Capital Limited 2,156,893 1,608,672 548,221 34%
Tangible book value attributable to Burford Capital Limited per ordinary share 9.85 7.36 2.49 34%
§ Total revenues in FY23 of $977 million (FY22: $251 million) were a driver of
significant earnings growth
o Realized gains on total capital provision assets of $187 million in FY23
driven by capital provision-direct assets, representing our highest returning
core legal finance strategy
o Unrealized gains, excluding YPF-related assets, on capital provision assets
increased 120% in FY23 to $158 million (FY22: $72 million), due to portfolio
progress
o YPF-related assets generated $543 million of unrealized gains in FY23, due
mainly to favorable summary judgment in the first quarter of 2023 and
favorable final judgment in the third quarter of 2023
§ Operating income in FY23 of $708 million (FY22: $128 million), attributable
principally to growth of 290% in total revenues
o Operating expenses in FY23 of $269 million (FY22: $123 million), reflecting
strong portfolio performance
- Total operating expenses in 2023 include almost $130 million of non-cash
accruals and one-time or case expenses
o Strong revenue growth caused total operating expenses (including all non-cash
accruals) as a percentage of total revenues to decline to 27% in 2023 from 49%
in 2022
o Increase in portfolio value, including unrealized gains on the YPF-related
assets, drove increase in accrued compensation expense associated with carried
interest
- Long-term incentive compensation includes accrued expenses and related
employee benefits and are only paid out upon receipt of cash proceeds from net
realized gains of capital provision assets
§ Net income in FY23 of $611 million (FY22: $31 million) amounted to 63% of
total revenues
o Net income per diluted share in FY23 of $2.74 (FY22: $0.14 per diluted share)
§ Tangible book value attributable to Burford Capital Limited of $2.2 billion at
December 31, 2023 (December 31, 2022: $1.6 billion)
o Tangible book value attributable to Burford Capital Limited per ordinary share
increased 34% to $9.85 at December 31, 2023 (December 31, 2022: $7.36),
primarily reflecting strong earnings
§ Burford-only ROTE for FY23 of 32% (FY22: 2%)
Selected portfolio metrics
Burford-only December 31, 2023 December 31, 2022 $ change % change
($ in thousands)
Deployed cost 1,573,531 1,486,150 87,381 6%
Plus: Fair value adjustments 1,814,070 1,117,855 696,215 62%
Fair value 3,387,601 2,604,005 783,596 30%
Undrawn commitments 1,396,061 1,299,048 97,013 7%
Total capital provision-direct portfolio 4,783,662 3,903,053 880,609 23%
Total capital provision portfolio(1) 4,840,117 3,942,700(2) 897,417 23%
(1) Represents capital provision-direct and capital provision-indirect.
(2) The fair value of $31.4 million for the Burford-only capital
provision-indirect assets did not include an additional $1.0 million for the
Burford-only portion of the receivable from due from settlement of capital
provision assets on concluded assets in the Strategic Value Fund for a total
fair value of $32.4 million for Burford-only capital provision-indirect
assets.
( )
§ Fair value of Burford-only capital provision-direct assets increased by $784
million to $3.4 billion at December 31, 2023 (December 31, 2022: $2.6 billion)
§ Of the $784 million increase in capital provision-direct asset fair value in
FY23, $549 million attributable to the YPF-related assets
§ Cumulative ROIC since inception from Burford-only capital provision-direct
assets of 82% (December 31, 2022: 88%) and IRR of 27% (December 31, 2022: 29%)
Liquidity and capital
Burford-only (non-GAAP) December 31, 2023 December 31, 2022 $ change % change
($ in thousands)
Liquidity
Cash and cash equivalents 195,915 73,679 122,236 166%
Marketable securities 107,561 136,358 (28,797) -21%
Total liquidity 303,476 210,037 93,439 44%
Due from settlement of capital provision assets 185,267 114,650 70,617 62%
§ Burford-only cash and cash equivalents and marketable securities of $303
million at December 31, 2023 (December 31, 2022: $210 million)
o Robust liquidity position at December 31, 2023 primarily reflects continued
solid Burford-only cash receipts and issuance in June 2023 of $400 million of
senior notes due 2031
o Liquidity position enhanced in January 2024 by $275 million tack-on offering
of senior notes originally issued in June 2023
§ Burford-only due from settlement of capital provision assets of $185 million
at December 31, 2023 (December 31, 2022: $115 million)
§ Total debt outstanding of $1.6 billion at December 31, 2023 (December 31,
2022: $1.3 billion)
o Leverage decreased in FY23, primarily driven by asset and equity growth and
remains well below covenant ceiling levels
o In June 2023, Moody's revised its outlook on its Ba2 rating to positive from
stable
o In October 2023, S&P revised its outlook on its BB- rating to positive
from stable
§ Declared dividend of 6.25¢ per ordinary share payable, subject to shareholder
approval at the annual general meeting to be held in May 2024, on June 14,
2024 to shareholders of record on May 24, 2024, with an ex-dividend date of
May 23, 2024
SEC Reporting
We anticipate filing our annual report on Form 20-F with the US Securities and
Exchange Commission within the next 30 days. We expect that to be our last
filing on Form 20-F, used by foreign private issuers. Even if we do not lose
foreign private issuer status by having more than 50% US investors on June 30,
2024, we nevertheless intend to move to reporting as a full US issuer and
using Form 10-K for the 2024 fiscal year.
In our forthcoming Form 20-F, we will be reporting a material weakness in our
internal control over financial reporting and that our disclosure controls and
procedures were not effective in the aftermath of the adoption of our new
valuation policy. That material weakness and corresponding controls'
determinations relate to the lack of documented available evidence
demonstrating the precision of management's application of the process to
determine certain assumptions used in the measurement of the fair value of
capital provision assets. To be clear, this is an issue of internal
documentation of a management process; no material accounting errors were
identified as a result.
Investor and analyst conference call
Burford will hold a conference call for investors and analysts at 8.00am EDT /
12.00pm GMT on Thursday, March 14, 2024. The dial-in numbers for the
conference call are +1 646 307-1963 (USA) or +1 800 715-9871 (USA & Canada
toll free) / +44 (0)20 3481 4247 (UK) or +44 800 260 6466 (UK toll free) and
the access code is 9722470. To minimize the risk of delayed access,
participants are urged to dial into the conference call by 7.40am EDT /
11.40am GMT.
A live webcast of the call will also be available at
https://events.q4inc.com/attendee/461322893
(https://events.q4inc.com/attendee/461322893) , and pre-registration at that
link is encouraged.
An accompanying FY23 and 4Q23 results presentation for investors and analysts
will also be made available on Burford's website prior to the conference call
at http://investors.burfordcapital.com (http://investors.burfordcapital.com) .
Following the conference call, a replay facility for this event will be
accessible through the webcast at https://events.q4inc.com/attendee/461322893
(https://events.q4inc.com/attendee/461322893) .
For further information, please contact:
Burford Capital Limited
For investor and analyst inquiries:
Robert Bailhache, Head of Investor Relations, EMEA and Asia - email +44 (0)20 3530 2023
(mailto:rbailhache@burfordcapital.com)
Jim Ballan, Head of Investor Relations, Americas - email +1 (646) 793 9176
(mailto:JBallan@burfordcapital.com)
For press inquiries:
David Helfenbein, Vice President, Public Relations - email +1 (212) 235 6824
(mailto:dhelfenbein@burfordcapital.com)
Deutsche Numis - NOMAD and Joint Broker +44 (0)20 7260 1000
Giles Rolls
Charlie Farquhar
Jefferies International Limited - Joint Broker +44 (0)20 7029 8000
Graham Davidson
James Umbers
Berenberg - Joint Broker +44 (0)20 3207 7800
Toby Flaux
James Thompson
Yasmina Benchekroun
About Burford Capital
Burford Capital is the leading global finance and asset management firm
focused on law. Its businesses include litigation finance
(https://www.burfordcapital.com/) and risk management, asset recovery and a
wide range of legal finance and advisory activities. Burford is publicly
traded on the New York Stock Exchange (NYSE: BUR) and the London Stock
Exchange (LSE: BUR), and it works with companies and law firms around the
world from its offices in New York, London, Chicago, Washington, DC,
Singapore, Dubai, Sydney and Hong Kong.
For more information, please visit www.burfordcapital.com
(http://www.burfordcapital.com) .
Summary financial statements and reconciliations
The tables below set forth summaries of the consolidated and Burford-only
statements of operations for the years ended December 31, 2023 and 2022 and
the three months ended December 31, 2023 and 2022, the consolidated and
Burford-only statements of financial position at December 31, 2023 and 2022
and corresponding reconciliations from consolidated to Burford-only financial
results. Furthermore, the tables below set forth certain additional
reconciliations for financial information contained in this announcement.
Summary consolidated statements of operations
Years ended Three months ended
December 31, December 31,
($ in thousands) 2023 2022 2023 2022
Revenues
Capital provision income/(loss) 1,341,923 319,108 325,810 165,942
(Less)/Plus: Third-party interests in capital (279,263) (494) (43,319) (12,622)
provision assets
Asset management income 7,642 9,116 1,875 2,025
Services and other income/(loss) 16,600 (8,503) 8,207 5,991
Total revenues 1,086,902 319,227 292,573 161,336
Total operating expenses 271,236 124,272 120,237 42,126
Operating income/(loss) 815,666 194,955 172,336 119,210
Finance costs and loss on debt extinguishment 99,135 78,264 28,445 20,452
Foreign currency transactions (gains)/losses (21,752) 7,674 603 (1,712)
Income/(loss) before income taxes 738,283 109,017 144,494 100,470
Benefit from/(provision for) income taxes (20,084) (11,558) (4,534) (754)
Net income/(loss) 718,199 97,459 139,960 99,716
Net income/(loss) attributable to Burford Capital Limited shareholders 610,522 30,506 100,095 81,914
Net income/(loss) attributable to Burford Capital Limited shareholders per
ordinary share
Basic $2.79 $0.14 $0.46 $0.37
Diluted $2.74 $0.14 $0.45 $0.37
Summary Burford-only statement of operations
Years ended Three months ended
December 31, December 31,
($ in thousands) 2023 2022 2023 2022
Revenues
Capital provision income 896,371 202,878 219,969 122,436
Asset management income 63,712 56,080 22,530 14,758
Services and other income 16,459 (8,353) 8,116 5,979
Total revenues 976,542 250,605 250,615 143,173
Operating expenses 268,538 122,696 118,161 41,751
Operating income 708,004 127,909 132,454 101,422
Net income 610,522 30,506 100,095 81,914
Net income per share:
Basic $2.79 $0.14 $0.46 $0.37
Diluted $2.74 $0.14 $0.45 $0.37
Reconciliation of summary consolidated statement of operations to summary
Burford-only statement of operations
Year ended December 31, 2023
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Capital provision income 1,341,923 (1,073) (132,094) (277,102) (31,385) (3,898) 896,371
(Less): Third-party interests in capital provision assets (279,263) - - 277,030 - 2,233 -
Asset management income 7,642 108 55,962 - - - 63,712
Services and other income 16,600 (2) (76) - - (63) 16,459
Total revenues 1,086,902 (967) (76,208) (72) (31,385) (1,728) 976,542
Operating expenses 271,236 (965) 369 (72) (411) (1,619) 268,538
Operating income 815,666 (2) (76,577) - (30,974) (109) 708,004
Net income/(loss) 718,199 (2) (76,577) - (30,974) (124) 610,522
Year ended December 31, 2022
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Capital provision income 391,108 3,709 (112,370) 661 (1,417) (6,813) 202,878
(Less): Third-party interests in capital provision assets (494) - - (693) - 1,187 -
Asset management income 9,116 312 46,652 - - - 56,080
Services and other income (8,503) 184 (3) - - (31) (8,353)
Total revenues 319,227 4,205 (65,721) (32) (1,417) (5,657) 250,605
Operating expenses 124,272 (995) 136 (32) (498) (187) 122,696
Operating income 194,955 5,200 (65,857) - (919) (5,470) 127,909
Net income/(loss) 97,459 5,200 (65,857) - (919) (5,377) 30,506
Three months December 31, 2023
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Capital provision income 325,810 (21) (47,665) (41,371) (11,012) (5,772) 219,969
(Less): Third-party interests in capital provision assets (43,319) - - 41,320 - 1,999 -
Asset management income 1,875 - 20,655 - - - 22,530
Services and other income 8,207 (1) (71) - - (19) 8,116
Total revenues 292,573 (22) (27,081) (51) (11,012) (3,792) 250,615
Operating expenses 120,237 (32) 79 (51) (132) (1,940) 118,161
Operating income 172,336 10 (27,160) - (10,880) (1,852) 132,454
Net income/(loss) 139,960 10 (27,610) - (10,880) (1,835) 100,095
Three months ended December 31, 2022
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Capital provision income 165,942 (152) (27,105) (11,907) (1,194) (3,148) 122,436
(Less): Third-party interests in capital provision assets (12,622) - - 11,877 - 745 -
Asset management income 2,025 46 12,687 - - - 14,758
Services and other income 5,991 1 (3) - - (10) 5,979
Total revenues 161,336 (105) (14,421) (30) (1,194) (2,413) 143,173
Operating expenses 42,126 (183) 27 (30) (145) (44) 41,751
Operating income 119,210 78 (14,448) - (1,049) (2,369) 101,422
Net income/(loss) 99,716 78 (14,449) - (1,049) (2,382) 81,914
Reconciliation of consolidated capital provision income excluding YPF-related
assets
($ in thousands) Year ended Three months ended
December 31, 2023 December 31, 2023
Capital provision income 1,341,923 325,810
Less: Capital provision income from YPF-related assets 820,011 124,773
Capital provision income excluding YPF-related assets 521,912 201,037
Reconciliation of operating expenses from the consolidated statements of
operations to Burford-only statements of operations
Year ended December 31, 2023
(GAAP) (non-GAAP)
Eliminations and
($ in millions) Consolidated adjustments Burford-only
Operating expenses 271.2 (2.7) 268.5
Non-cash accruals and one-time or case expenses:
Long-term incentive compensation including accruals (YPF-related assets) 69.2 - 69.2
Long-term incentive compensation including accruals (CEO and CIO related) 16.9 - 16.9
Case-related expenditures ineligible for inclusion in asset cost 16.5 (1.8) 14.7
Legacy asset recovery incentive compensation including accruals 17.3 - 17.3
Expenses related to audit, professional and corporate legal fees due to the 3.3 - 3.3
development of the revised fair value methodology and build-out of quarterly
reporting
Deferred compensation plan and retirement plan 7.4 - 7.4
Total 130.6 (1.8) 128.8
Summary consolidated statement of financial position
($ in thousands) December 31, December 31, 2022
2023
Total assets 5,837,394 4,288,359
Total liabilities 2,629,614 1,901,289
Total Burford Capital Limited equity 2,290,858 1,742,584
Non-controlling interests 916,922 644,486
Total shareholders' equity 3,207,780 2,387,070
Basic ordinary shares outstanding 218,962,441 218,581,877
Total shareholders' equity attributable to Burford Capital Limited per basic 10.46 7.97
ordinary share
Total shareholders' equity per basic ordinary share 14.65 10.92
Reconciliation of summary consolidated statement of financial position to
summary Burford-only statement of financial position
December 31, 2023
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Total assets 5,837,394 - (634,239) (686,304) (222,413) (78,574) 4,215,864
Total liabilities 2,629,614 - - (686,304) (100) (18,204) 1,925,006
Total shareholders' equity 3,207,780 - (634,239) - (222,313) (60,370) 2,290,858
December 31, 2022
(GAAP) (Non-GAAP)
Elimination of third-party interests
($ in thousands) Consolidated Strategic Value Fund BOF-C Colorado Advantage Fund Other Burford-only
Total assets 4,288,359 (2,779) (477,590) (409,249) (103,523) (76,792) 3,218,426
Total liabilities 1,901,289 (228) (4,234) (409,249) (120) (11,616) 1,475,842
Total shareholders' equity 2,387,070 (2,551) (473,356) - (103,403) (65,176) 1,742,584
Reconciliation of components of realizations from a consolidated basis to a
Group-wide basis
Year ended December 31, 2023
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 564,491 (68,275) 496,216 112,188 124,409 732,813
Capital provision-indirect 143,802 (109,392) 34,410 109,078 - 143,488
Post-settlement - - - 241,490 - 241,490
Total realizations 708,293 (177,667) 530,626 462,756 124,409 1,117,791
Year ended December 31, 2022
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 402,196 (51,987) 350,209 174,707 65,988 590,904
Capital provision-indirect 24,538 (14,216) 10,322 28,746 - 39,068
Post-settlement - - - 104,637 - 104,637
Total realizations 426,734 (66,203) 360,531 308,090 65,988 734,609
Three months ended December 31, 2023
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 229,077 (6,962) 222,115 22,273 59,415 303,803
Capital provision-indirect 84,583 (70,075) 14,508 70,076 - 84,584
Post-settlement - - - 123,183 - 123,183
Total realizations 313,660 77,037 236,623 215,532 59,415 511,570
Three months ended December 31, 2022
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 165,992 (8,263) 157,729 71,871 16,445 246,045
Capital provision-indirect 3,727 (3,091) 636 2,997 - 3,633
Post-settlement - - - 54,188 - 54,188
Total realizations 169,719 (11,354) 158,365 129,056 16,445 303,866
Reconciliation of components of deployments from a consolidated basis to a
Group-wide basis
Year ended December 31, 2023
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 505,893 (123,698) 382,195 25,679 122,352 530,226
Capital provision-indirect 176,134 (146,778) 29,356 146,778 - 176,134
Post-settlement - - - 85,397 - 85,397
Total deployments 682,027 (270,476) 411,551 257,854 122,352 791,757
Year ended December 31, 2022
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 605,402 (148,296) 457,106 30,574 147,976 635,656
Capital provision-indirect 121,896 (101,573) 20,323 101,158 - 121,481
Post-settlement - - - 170,689 - 170,689
Total deployments 727,298 (249,869) 477,429 302,421 147,976 927,826
Three months ended December 31, 2023
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 104,678 (26,915) 77,763 8,317 24,577 110,657
Capital provision-indirect 31,083 (25,902) 5,181 25,902 - 31,083
Post-settlement - - - 42,125 - 42,125
Total deployments 135,761 (52,817) 82,944 76,344 24,577 183,865
Three months ended December 31, 2022
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only Other funds BOF-C Group-wide
Capital provision-direct 223,920 (42,233) 181,687 9,630 42,517 233,834
Capital provision-indirect 92,067 (76,874) 15,193 75,960 - 91,153
Post-settlement - - - 120,118 - 120,118
Total deployments 315,987 (119,107) 196,880 205,708 42,517 445,105
Reconciliation of consolidated proceeds from capital provision assets to
Burford-only cash receipts
($ in thousands) Year ended December 31, 2023 Year ended December 31, 2022
Consolidated proceeds from capital provision assets 559,362 387,786
Less: Elimination of third-party interests (117,296) (81,857)
Burford-only total proceeds from capital provision assets 442,066 305,929
Burford-only proceeds from capital provision-direct assets 414,726 295,636
Burford-only proceeds from capital provision-indirect assets 27,340 10,293
Burford-only total proceeds from capital provision assets 442,066 305,929
Consolidated asset management income 7,642 9,116
Plus: Eliminated income from funds 56,070 46,964
Burford-only asset management income 63,712 56,080
Less: Non-cash adjustments((1)) (31,391) (41,321)
Burford-only proceeds from asset management income 32,321 14,759
Burford-only proceeds from marketable security interest and dividends 6,297 3,585
Burford-only proceeds from other income 7,875 3,713
Burford-only proceeds from non-recurring items 650 -
Burford-only proceeds from other items 14,822 7,298
Cash receipts 489,209 327,986
(1) Adjustments for the change in asset management receivables accrued during
the applicable period but not yet received at the end of such period.
($ in thousands) Three months ended December 31, 2023 Three months ended December 31, 2022
Consolidated proceeds from capital provision assets 119,208 105,464
Less: Elimination of third-party interests (22,709) (11,720)
Burford-only total proceeds from capital provision assets 96,499 93,744
Burford-only proceeds from capital provision-direct assets 95,490 93,137
Burford-only proceeds from capital provision-indirect assets 1,009 607
Burford-only total proceeds from capital provision assets 96,499 93,744
Consolidated asset management income 1,875 2,025
Plus: Eliminated income from funds 20,655 12,733
Burford-only asset management income 22,530 14,758
Less: Non-cash adjustments((1)) (19,254) (11,794)
Burford-only proceeds from asset management income 3,276 2,964
Burford-only proceeds from marketable security interest and dividends 2,672 1,740
Burford-only proceeds from other income 6,380 66
Burford-only proceeds from non-recurring items 650 -
Burford-only proceeds from other items 9,702 1,806
Cash receipts 109,477 98,514
(1) Adjustments for the change in asset management receivables accrued during
the applicable period but not yet received at the end of such period.
Reconciliation of consolidated portfolio to Group-wide portfolio
December 31, 2023
(GAAP) (non-GAAP)
Elimination of
third-party
($ in thousands) Consolidated interests Burford-only Other funds BOF-C Group-wide
Capital provision assets - direct:
Deployed cost 2,116,304 (542,773) 1,573,531 416,318 428,110 2,417,959
Plus: Fair value adjustments 2,743,575 (929,505) 1,814,070 180,169 220,363 2,200,935
Fair value 4,859,879 (1,472,278) 3,387,601 596,487 648,473 4,632,561
Capital provision assets - indirect:
Fair value 185,509 (140,998) 44,511 ( ) 140,998 - 185,509
Total capital provision assets 5,045,388 (1,613,276) 3,432,112 ( ) 737,485 648,473 4,818,070
Post-settlement assets:
Deployed cost - - - 253,062 - 253,062
Plus: Fair value adjustments - - - 45,792 - 45,792
Fair value - - - 298,854 - 298,854
Undrawn commitments:
Capital provision-direct 1,801,627 (405,566) 1,396,061 126,560 396,646 1,919,267
Capital provision-indirect 71,662 (59,718) 11,944 59,718 - 71,662
Post-settlement - - - 62,455 - 62,455
Total undrawn commitments 1,873,289 (465,284) 1,408,005 248,733 396,646 2,053,384
Total portfolio 6,918,677 (2,078,560) 4,840,117 1,285,072 1,045,119 7,170,308
December 31, 2022
(GAAP) (non-GAAP)
Elimination of
third-party
($ in thousands) Consolidated interests Burford-only Other funds BOF-C Group-wide
Capital provision assets - direct:
Deployed cost 1,934,662 (448,512) 1,486,150 422,098 383,322 2,291,570
Plus: Fair value adjustments 1,687,641 (569,786) 1,117,855 133,122 133,660 1,384,637
Fair value 3,622,303 (1,018,298) 2,604,005 555,220 516,982 3,676,207
Capital provision assets - indirect:
Fair value 113,253 (81,839) 31,414 ( (1)) 81,840 - 113,254
Total capital provision assets 3,735,556 (1,100,136) 2,635,419 637,060 516,982 3,789,461
Post-settlement assets:
Deployed cost - - - 358,193 - 358,193
Plus: Fair value adjustments - - - 81,067 - 81,067
Fair value - - - 439,260 - 439,260
Undrawn commitments:
Capital provision-direct 1,671,327 (372,279) 1,299,048 182,372 371,724 1,853,144
Capital provision-indirect 49,400 (41,167) 8,233 41,167 - 49,400
Post-settlement - - - 15,606 - 15,606
Total undrawn commitments 1,720,727 (413,446) 1,307,281 239,145 371,724 1,918,150
Total portfolio 5,456,283 (1,513,583) 3,942,700 1,315,465 888,706 6,146,871
(1) The fair value of $2,635.4 million for the Burford-only capital provision
assets did not include an additional $1.0 million for the Burford only portion
of the receivable from due from settlement of capital provision assets on
concluded assets in the Strategic Value Fund for a total fair value of
$2,636.4 million for Burford-only capital provision assets as noted in the
table under "Reconciliation of consolidated to Burford-only fair value of the
YPF-related assets".
Reconciliation of consolidated to Burford-only cash and cash equivalents and
marketable securities
December 31, 2023 December 31, 2022
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
($ in thousands) Consolidated Elimination of third-party interests Burford-only Consolidated Elimination of third-party interests Burford-only
Cash and cash equivalents 220,549 (24,634) 195,915 107,658 (33,979) 73,679
Marketable securities 107,561 - 107,561 136,358 - 136,358
Total cash and cash equivalents and marketable securities 328,110 (24,634) 303,476 244,016 (33,979) 210,037
Reconciliation of consolidated to Burford-only fair value of the YPF-related
assets
December 31, 2023 December 31, 2022
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
($ in thousands) Consolidated Elimination of third-party interests Burford-only Consolidated Elimination of third-party interests Burford-only
YPF-related assets 2,058,117 (686,460) 1,371,657 1,232,549 (409,514) 823,035
Other assets 2,987,271 (926,816) 2,060,455 2,503,007 (689,602) 1,813,405
Capital provision assets 5,045,388 (1,613,276) 3,432,112 3,735,556 (1,099,116) 2,636,440
Reconciliation of consolidated to Burford-only fair value adjustment during
the period, net of previously recognized unrealized gains transferred to
realized gains on YPF-related assets
December 31, 2023 December 31, 2022
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
($ in thousands) Consolidated Elimination of third-party interests Burford-only Consolidated Elimination of third-party interests Burford-only
YPF-related income 820,011 (277,102) 542,909 (2,715) 502 (2,213)
Excluding YPF-related income 261,633 (103,704) 157,929 171,819 (100,049) 71,770
Capital provision income-unrealized 1,081,644 (380,806) 700,838 169,104 (99,547) 69,557
Reconciliation of consolidated to Burford-only due from settlement of capital
provision assets
December 31, 2023 December 31, 2022
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
($ in thousands) Consolidated Elimination of third-party interests Burford-only Consolidated Elimination of third-party interests Burford-only
Due from settlement of capital provision assets 265,540 (80,273) 185,267 116,582 (1,932) 114,650
Reconciliation of consolidated to Burford-only realized gains on capital
provision-direct assets
Periods ended December 31, 2023 and 2022
(GAAP) (Non-GAAP)
($ in thousands) Consolidated Eliminations and adjustments Burford-only total Burford-only Capital provision-direct Burford-only Capital provision-indirect
Realized gains for the year ended December 31, 2023 251,618 (64,242) 187,376 186,443 933
Realized gains for the year ended December 31, 2022 161,707 (27,234) 134,473 133,357 1,116
Realized gains for the three months ended December 31, 2023 80,287 (17,431) 62,856 62,904 (48)
Realized gains for the three months ended December 31, 2022 75,898 (5,381) 70,517 70,487 30
Reconciliation of shareholders' equity attributable to Burford Capital Limited
per ordinary share
($ in thousands, except share data) December 31, 2023 December 31, 2022
Total shareholders' equity 3,207,780 2,387,070
Less: Non-controlling interests (916,922) (644,486)
Total Burford Capital Limited equity 2,290,858 1,742,584
Basic ordinary shares outstanding 218,962,441 218,581,877
Shareholders' equity attributable to Burford Capital Limited per ordinary $10.46 $7.97
share
Reconciliation of tangible book value attributable to Burford Capital Limited
per ordinary share
($ in thousands, except share data) December 31, 2023 December 31, 2022
Total shareholders' equity 3,207,780 2,387,070
Less: Non-controlling interests (916,922) (644,486)
Total Burford Capital Limited equity 2,290,858 1,742,584
Less: Goodwill (133,965) (133,912)
Tangible book value attributable to Burford Capital Limited 2,156,893 1,608,672
Basic ordinary shares outstanding 218,962,441 218,581,877
Tangible book value attributable to Burford Capital Limited per ordinary share $9.85 $7.36
Reconciliation of Return on tangible equity
($ in thousands, except share data) December 31, 2023 December 31, 2022
Net income/(loss) 718,199 97,459
Less: Net income/(loss) attributable to noncontrolling interests (107,677) (66,953)
Net income/(loss) attributable to Burford Capital Limited 610,522 30,506
Total shareholders' equity at beginning of period 2,387,070 2,108,017
Less: Non-controlling interests at beginning of period (644,486) (412,145)
Total Burford Capital Limited equity at beginning of period 1,742,584 1,695,872
Less: Goodwill at beginning of period (133,912) (134,019)
Tangible book value attributable to Burford Capital Limited at beginning of 1,608,672 1,561,853
period
Total shareholders' equity at end of period 3,207,780 2,387,070
Less: Non-controlling interests at end of period (916,922) (644,486)
Total Burford Capital Limited equity at end of period 2,290,858 1,742,584
Less: Goodwill at end of period (133,965) (133,912)
Tangible book value attributable to Burford Capital Limited at end of period 2,156,893 1,608,672
Average tangible book value attributed to Burford Capital Limited 1,882,783 1,585,263
Return on tangible equity 32% 2%
Definitions and use of non-GAAP financial measures and alternative performance
measures
Burford reports its consolidated financial results in accordance with US GAAP.
US GAAP requires us to present financial statements that consolidate some of
the limited partner interests in private funds we manage as well as assets
held on our balance sheet where we have a partner or minority investor. We
therefore refer to various presentations of our consolidated financial results
as follows:
• Consolidated refers to assets, liabilities and activities that include those
third-party interests, partially owned subsidiaries and special purpose
vehicles that we are required to consolidate under US GAAP. At the date of
this announcement, the major entities where there is also a third-party
partner in, or owner of, those entities include Burford Opportunity Fund C LP,
Burford Advantage Master Fund LP, Colorado Investments Limited ("Colorado")
and several other entities in which Burford holds investments where there is
also a third-party partner in, or owner of, those entities.
• Burford-only refers to assets, liabilities and activities that pertain only to
Burford on a proprietary basis, excluding any third-party interests and the
portions of jointly owned entities owned by others.
• Group-wide refers to the totality of assets managed by Burford, including
those portions of the private funds owned by third parties and including
private funds that are not consolidated within Burford's consolidated
financial statements. Group-wide is therefore the sum of Burford-only and
non-controlling interests in consolidated and non-consolidated private funds.
Group-wide does not include third-party interests in capital provision assets,
the economics of which have been sold to those third parties, which do not
meet the criteria to be recognized as a sale under US GAAP. This includes the
third-party interests in Colorado and other capital provision asset
subparticipations.
We subdivide our capital provision assets into two categories:
• Direct, which includes all of our capital provision assets that we have
originated directly (i.e., not through participation in a private fund) from
our balance sheet. We also include direct (i.e., not through participation in
a private fund) complex strategies assets in this category.
• Indirect, which includes our balance sheet's participations in one of our
private funds (i.e., Burford Advantage Master Fund LP).
We also use certain unaudited alternative performance measures, including:
• Internal rate of return ("IRR") is a discount rate that makes the net present
value of a series of cash flows equal to zero and is expressed as a percentage
figure. We compute IRR on concluded (including partially concluded) legal
finance assets by treating that entire portfolio (or, when noted, a subset
thereof) as one undifferentiated pool of capital and measuring actual and, if
necessary, estimated inflows and outflows from that pool, allocating costs
appropriately. IRRs do not include unrealized gains or losses.
• Return on invested capital ("ROIC") from a concluded asset is the absolute
amount of realizations from such asset in excess of the amount of expenditure
incurred in financing such asset divided by the amount of expenditure
incurred, expressed as a percentage figure. ROIC is a measure of our ability
to generate absolute returns on our assets. Some industry participants express
returns on a multiple of invested capital ("MOIC") instead of a ROIC basis.
MOIC includes the return of capital and, therefore, is 1x higher than ROIC. In
other words, 70% ROIC is the same as 1.70x MOIC.
Other unaudited alternative performance measures and terms we use include:
• Commitment is the amount of financing we agree to provide for a legal finance
asset. Commitments can be definitive (requiring us to provide financing on a
schedule or, more often, when certain expenses are incurred) or discretionary
(allowing us to provide financing after reviewing and approving a future
matter). Unless otherwise indicated, commitments include deployed cost and
undrawn commitments.
• Deployment refers to the financing provided for an asset, which adds to our
deployed cost in such asset.
• Deployed cost is the amount of financing we have provided for an asset at the
applicable point in time.
• Fair value adjustment is the amount of unrealized gain or loss recognized in
our consolidated statements of operations in the relevant period and added to
or subtracted from, as applicable, the asset or liability value in our
consolidated statements of financial position.
• Portfolio includes deployed cost, net unrealized gains or losses and undrawn
commitments.
• Realization: A legal finance asset is realized when the asset is concluded
(i.e., when litigation risk has been resolved). A realization will result in
us receiving cash or, occasionally, non-cash assets, or recognizing a due from
settlement receivable, reflecting what we are owed on the asset.
• Realized gain / loss reflects the total amount of gain or loss, relative to
cost, generated by a legal finance asset when it is realized, calculated as
realized proceeds less deployed cost, without regard for any previously
recognized fair value adjustment.
• Unrealized gain / loss represents the fair value of our legal finance assets
over or under their deployed cost, as determined in accordance with the
requirements of the applicable US GAAP standards, for the relevant financial
reporting period (consolidated statements of operations) or cumulatively
(consolidated statements of financial position).
• YPF-related assets refers to our Petersen and Eton Park legal finance assets,
which are two claims relating to the Republic of Argentina's nationalization
of YPF S.A., the Argentine energy company.
We also use certain non-GAAP financial measures, including:
• Book value per ordinary share is calculated by dividing total Burford Capital
Limited equity by the number of ordinary shares issued and outstanding.
• Cash receipts provide a measure of the cash that our capital provision and
other assets generate during a given period as well as cash from certain other
fees and income. In particular, cash receipts represent the cash generated
from capital provision and other assets, including cash proceeds from realized
or concluded assets and any related hedging assets, and cash received from
asset management income, services and/or other income, before any deployments
into financing existing or new assets. Cash receipts are a non-GAAP financial
measure and should not be considered in isolation from, as a substitute for,
or superior to, financial measures calculated in accordance with US GAAP. The
most directly comparable measure calculated in accordance with US GAAP is
proceeds from capital provision assets as set forth in our consolidated
statements of cash flows. We believe that cash receipts are an important
measure of our operating and financial performance and are useful to
management and investors when assessing the performance of our Burford-only
capital provision assets.
• Return on tangible equity ("ROTE") is Burford-only net income/(loss) divided
by the average of tangible equity at the beginning and end of the relevant
period, with tangible equity calculated as total Burford Capital Limited
equity less goodwill. ROTE is a non-GAAP financial measure and should not be
considered in isolation from, as a substitute for, or superior to, financial
measures calculated in accordance with US GAAP. The most directly comparable
measure calculated in accordance with US GAAP is net income/(loss)
attributable to Burford Capital Limited shareholders as set forth in our
consolidated statements of operations. We believe ROTE is an important measure
of our operating and financial performance and is useful to management and
investors when assessing the performance of our Burford-only capital provision
assets.
• Tangible book value attributable to Burford Capital Limited is calculated by
subtracting intangible assets (such as goodwill) from total Burford Capital
Limited equity. Tangible book value attributable to Burford Capital Limited
per ordinary share is calculated by dividing tangible book value attributable
to Burford Capital Limited by the total number of outstanding ordinary shares.
Each of tangible book value attributable to Burford Capital Limited and
tangible book value attributable to Burford Capital Limited per ordinary share
is a non-GAAP financial measure and should not be considered in isolation
from, as a substitute for, or superior to, financial measures calculated in
accordance with US GAAP. The most directly comparable measure calculated in
accordance with US GAAP is total Burford Capital Limited equity as set forth
in our consolidated statements of financial position. We believe that tangible
book value attributable to Burford Capital Limited per ordinary share is an
important measure of our financial condition and is useful to management and
investors when assessing capital adequacy and our ability to generate earnings
on tangible equity invested by our shareholders.
Non-GAAP financial measures should not be considered in isolation from, as
substitutes for, or superior to, financial measures calculated in accordance
with US GAAP.
This announcement does not constitute an offer to sell or the solicitation of
an offer to buy any ordinary shares or other securities of Burford.
This announcement does not constitute an offer of any Burford private fund.
Burford Capital Investment Management LLC, which acts as the fund manager of
all Burford private funds, is registered as an investment adviser with the
US Securities and Exchange Commission. The information provided in this
announcement is for informational purposes only. Past performance is not
indicative of future results. The information contained in this announcement
is not, and should not be construed as, an offer to sell or the solicitation
of an offer to buy any securities (including, without limitation, interests or
shares in any of Burford private funds). Any such offer or solicitation may be
made only by means of a final confidential private placement memorandum and
other offering documents.
Forward-looking statements
This announcement contains "forward-looking statements" within the meaning of
Section 21E of the US Securities Exchange Act of 1934, as amended, regarding
assumptions, expectations, projections, intentions and beliefs about future
events. These statements are intended as "forward-looking statements". In some
cases, predictive, future-tense or forward-looking words such as "aim",
"anticipate", "believe", "continue", "could", "estimate", "expect",
"forecast", "guidance", "intend", "may", "plan", "potential", "predict",
"projected", "should" or "will" or the negative of such terms or other
comparable terminology are intended to identify forward-looking statements,
but are not the exclusive means of identifying such statements. In addition,
Burford and its representatives may from time to time make other oral or
written statements that are forward-looking, including in its periodic reports
that Burford files with, or furnishes to, the US Securities and Exchange
Commission, other information made available to Burford's security holders and
other written materials. By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors because they relate
to events and depend on circumstances that may or may not occur in the future.
Burford cautions that forward-looking statements are not guarantees of future
performance and are based on numerous assumptions, expectations, projections,
intentions and beliefs and that Burford's actual results of operations,
including its financial position and liquidity, and the development of the
industry in which it operates, may differ materially from (and be more
negative than) those made in, or suggested by, the forward-looking statements
contained in this announcement. Significant factors that may cause actual
results to differ from those Burford expects include, among others, those
discussed under "Risk Factors" in Burford's annual report on Form 20-F for the
year ended December 31, 2022 filed with the US Securities and Exchange
Commission on May 16, 2023 and other reports or documents that Burford files
with, or furnishes to, the US Securities and Exchange Commission from time to
time. In addition, even if Burford's results of operations, including its
financial position and liquidity, and the development of the industry in which
it operates are consistent with the forward-looking statements contained in
this announcement, those results of operations or developments may not be
indicative of results of operations or developments in subsequent periods.
Except as required by applicable law, Burford undertakes no obligation to
update or revise the forward-looking statements contained in this
announcement, whether as a result of new information, future events or
otherwise.
The 2023 financial information contained in this release and the accompanying
earnings presentation is unaudited; our final audited numbers could vary
materially from the information contained herein.
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